Have you thought about investing for your child’s future? I’m sure there are parents out there who have gone ahead and planned the future education of their children by getting them educational plans. That’s great! But, have you ever discussed about their financial future?

Money, coins, concept tree Sprout Growing With Sun Light In Savi by jk1991
Photo: Money, coins, concept tree Sprout Growing With Sun Light In Savi by jk1991

We cannot predict what will happen next and as parents, we want all the best for our children. It is not enough that you are living quite well off for many years now, to think that your children will have the same fate. It is a scary thought to lose all the money you have now because of some unforeseen financial disasters and leave nothing for your kids in the end. It is not impossible to happen, no one knows what the future holds. Come to think of it, even billionaires have some sort of safety plans just to ensure that their children will enjoy stress-free, financially secured lives. So, why can’t you?

Maybe it’s high time to invest your money, in particular in a mutual fund, don’t you think? You don’t have to put all your eggs in one basket, you can invest in multiple funds to reap many returns. Though, if this will be your first time and want to test the waters, go ahead and choose one you see fit for your end-goal.

For the benefit of all, here is one of the easiest explanation of what a Mutual Fund is:

A mutual fund is a pool of money collected from companies and private investors like you. The goal is to put the collected money in the right places so it can grow over time.

Let’s say you and your friends want a cake, but not everyone can buy on their own. What’s the best thing to do? Chip in! A trusted member from the group collects the money and buys the ingredients. And once the cake is baked, everyone gets a slice based on the amount they contributed.

That’s how simple mutual funds work! But unlike the cake you’ll eventually consume, the share you’ll get from the mutual funds is something that you can use for your future.

Alarm Clock And Money coins Stack And Alarm Clock On Background by jk1991
Alarm Clock And Money coins Stack And Alarm Clock On Background by jk1991

There are four (4) types of mutual funds:

Money Market Fund – Invest in a portfolio of short-term securities
Bond Fund – Invest in a portfolio of securities that earns regular income
Balanced Fund – Invest in a combined portfolio of fixed income and stock securities
Equity Fund – Invest in a portfolio of stocks

To tell you honestly, my husband and I were discussing about investments since last year and been thinking which one to get for each of my child. I’m still doing research and well, sharing them here for the benefit of those who have yet taken the plunge.

One good question many people ask is – why invest in mutual funds?

For me, because it’s safe and I can withdraw/redeem the money any time I need it. The latter reason may be a bit shallow, but as I’ve said above, we don’t know what the future will bring. At least, you know there is money you can get somewhere in case of emergency.

The ideal thing to do is, if you have more that you can spare, invest in another mutual fund. This way, you know you have a back up plan for your child’s financial future.

Besides, these types of investments are professionally handled and managed. People in this business really know what they’re talking about and what to do with your money. Risks will always be on the lurk and sometimes depending on what type of investor you are. But these will be reduced as assets will be placed in several non-correlated investments.

More importantly, your earnings from mutual funds are non-taxable. There’s some sort of relief in it when you know you get your earnings in full, lol.

Which mutual fund to choose?

Firstly, you need to really think about your needs, be it for personal or for your children. Secondly, how much you can initially invest. Don’t worry because you can add in more money to your current one. Though remember, the higher you invest, the more “happy” returns for you.

There is much more one needs to know before making a mutual fund investment. We’re talking about money here, so I kinda know how it feels to be scared to lose money on bad investments. Well, you don’t have to experience that, you just need to know where to properly start, which company can be trusted with your hard-earned money and the financial future of your kids.

You can start your research with https://www.philamfunds.com. If you have further questions, they can be easily reached via email phi.philamasset@aia.com.

You don’t have to be afraid to invest. It’s a much scarier thought if your children will financially suffer in the future! Arm yourself with much needed knowledge, then take the necessary actions!